| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers T > Headlines for Tricida, Inc. > News item |
Tricida’s Chapter 11 plan draws objection from U.S. trustee
By Sarah Lizee
Olympia, Wash., May 15 – Tricida, Inc.’s Chapter 11 plan drew an objection from the U.S. trustee overseeing the case, according to documents filed Friday with the U.S. Bankruptcy Court for the District of Delaware.
Regions 3 and 9 U.S. trustee Andrew R. Vara took issue with the opt-out mechanism for releases under the plan.
“The debtor, a public company, has proposed a plan whereby its shareholders are to receive no distribution under the plan, have no right to vote on the plan, and are deemed to reject the plan,” Vara said in his objection.
“Despite such treatment, the debtor seeks approval to deem all such public shareholders to have consented to release their direct claims against non-debtor third parties unless each such shareholder returns a form opting out of such releases, and such form is received by the debtor’s claims agent by the release opt-out deadline.
The U.S. trustee said the opt-out mechanism, which provides for negative, rather than affirmative consent, is especially inappropriate as to the debtor’s shareholders because they will receive no consideration whatsoever for the releases that will be imposed on them.
He said an opt-out mechanism for public shareholders is also inappropriate here because there is a pending shareholder lawsuit, styled as a class action, in which claims have been asserted against several current and former officers and directors, who are among the many recipients of the third-party releases.
The confirmation hearing is scheduled for May 19.
The San Francisco-based pharmaceutical company filed bankruptcy on Jan. 11 under Chapter 11 case number 23-10024.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.